Open AccessThe Production Relocation and Price Effects of US Trade Policy: The Case of Washing Machines
Author(s) -
Aaron Flaaen,
Alı Hortaçsu,
Felix Tintelnot
Publication year - 2020
Publication title -
american economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 16.936
H-Index - 297
eISSN - 1944-7981
pISSN - 0002-8282
DOI - 10.1257/aer.20190611
Subject(s) - relocation , economics , tariff , factoring , international economics , production (economics) , price elasticity of demand , china , monetary economics , international trade , macroeconomics , microeconomics , finance , computer science , political science , law , programming language
We estimate the price effect of US import restrictions on washers. The 2012 and 2016 antidumping duties against South Korea and China were accompanied by downward or minor price movements along with production relocation to other export platform countries. With the 2018 tariffs, on nearly all source countries, the price of washers increased nearly 12 percent. Interestingly, the price of dryers—not subject to tariffs—increased by an equivalent amount. Factoring in dryer prices and price increases by domestic brands, the 2018 tariffs on washers imply a tariff elasticity of consumer prices of above one. (JEL F13, F14, F23, L68, 019, P33)
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